Is Student Housing a Good Investment?
September 11, 2020
You might be wondering, “is student housing a good investment?” A straightforward answer is yes. Student housing is one of the most profitable and reliable investments in the real estate sector. The demand for student housing is usually high, especially at the start of every school year, when every student is looking for a place to stay.
One good thing about student housing investment is that it guarantees a steady flow of income due to the increase in demand for student housing. Many students prefer staying off-campus, giving you the chance to make huge profits. For that reason, student housing provides a sense of financial stability.
A Steady Market
Many people invest in student housing markets to enjoy the sector’s stability in terms of income flow. Unlike residential rental property, student properties are available for students. When built near highly-populated colleges or universities, there’s no doubt that investors will receive regular income without hassle.
The good news is that student accommodation properties are selling for vast sums of money. Besides renting out your apartment to students, you can also rent out some rooms to travelers during summer months. At this time, most student apartments are usually vacant, giving you a perfect opportunity to rent out yours.
Pro Tip: Student housing will always be in high demand during the school year and available to vacationers during breaks. The steady flow of income makes it a savvy investment choice!
It’s no doubt that student housing is a reliable investment. However, it also has a few drawbacks. Here are the three cons of investing in student properties:
High Turnover Rates
Students tend to move from one apartment to another at the end of every academic year. Some students will even move out in the middle of the semester, making it quite tricky to trust the tenants. You’ll have to welcome new students to stay in the property every year. Unfortunately, that can consume much of your time and resources.
Low Occupancy During Holidays
In many cases, students usually go for three-month holidays yearly. That means your property will always be tenant-free for three months annually. So, how do you go about that? As an investor, use the chance to renovate your apartment by adding fresh paints, furnishing the rooms, and performing other maintenance practices.
Students Can Be Reckless
According to many student housing investors, student apartments tend to wear and tear quickly due to some students’ reckless behavior. So, you may have to do regular maintenance, which can be costly in the long run. To avoid such cases, prepare rules and policies and post them everywhere to inform the tenants.
Should You Invest in Student Housing?
Without any doubt, the answer is yes! Like other types of investments, student property investments are among the most profitable ventures in the commercial real estate sector. The demand for student housing has been rising steadily for the past decade as the student population increases. To maximize profits during summer months, rent out the apartment to travelers. However, don’t forget to set rules.
Get in touch to learn more about student housing investments.